Can you switch lenders when your mortgage renews?
Quick summary
Yes, you can move to a new lender when your term ends. Finance Canada removed the minimum qualifying rate (the stress test) for a straight switch of a low-ratio insured mortgage, for applications on or after December 16, 2024, when conditions are met. Not every mortgage qualifies, so ask the new lender. Start with our mortgage renewal guide.
Checked November 10, 2026. Main source: Department of Finance Canada: Straight switches and portfolio insurance (December 2024, read November 10, 2026). See all 2 sources.
Key facts
- Straight switch
- No stress test at renewal when the conditions below are met
- Source: Finance Canada, effective December 16, 2024
- Amortization
- The existing schedule must be maintained
- Source: Finance Canada
- Added to the balance
- Up to $3,000 for transaction costs. No equity take-outs
- Source: Finance Canada
The conditions for a straight switch
Finance Canada describes a straight switch as moving to a new lender at renewal. It applies to low-ratio mortgages (loan-to-value up to 80%), for insurance applications that lenders submit on or after December 16, 2024. The conditions it lists:
- The original mortgage was made by a federally regulated financial institution and was assessed against the minimum qualifying rate.
- You renew with a new lender.
- The existing contractual amortization schedule is maintained.
- The unpaid principal may increase by up to $3,000 to cover costs such as penalties or fees. Equity take-outs are not permitted.
- All other eligibility criteria for government-guaranteed mortgage insurance still apply.
Source: Department of Finance Canada: Straight switches and portfolio insurance (December 2024, read November 10, 2026).
What to compare before you switch
The FCAC lists two alternatives to leaving your lender: the lender's blend-and-extend option, and negotiating a lower rate at renewal. Blend-and-extend avoids a prepayment penalty, may involve administrative fees, and uses a rate that blends your old rate with the new term's rate.
At the end of a term there is no prepayment penalty to leave a closed mortgage, but the FCAC lists other costs that can apply, such as administration, appraisal and discharge fees. Ask both lenders for all costs in writing.
Source: Financial Consumer Agency of Canada: Breaking your mortgage contract (modified October 15, 2025, read November 10, 2026).
What we could not confirm
The Finance Canada page covers insured low-ratio mortgages. We did not find an official page on how switching works for uninsured mortgages, or for what a lender may charge at the end of a term. Ask your lender.
Steps to take
- Look at your renewal date and your lender's offer. Ask how long the offer stays open.
- Ask your current lender for its best rate and for any fees.
- Get a written quote from another lender, with all fees.
- Use the renewal calculator to compare payments.
Questions people ask
Do I have to pass the stress test to switch lenders at renewal?
Not for a straight switch of a low-ratio insured mortgage meeting Finance Canada's conditions, for applications on or after December 16, 2024.
Can I borrow more when I switch?
Finance Canada says the principal may rise by up to $3,000 for costs, and equity take-outs are not permitted under a straight switch.
Is there a penalty to switch at renewal?
The FCAC says a closed mortgage normally has a penalty when broken during the term. Other fees can apply. Ask both lenders.
What is blend-and-extend?
The FCAC describes it as an option that avoids a prepayment penalty, may carry fees, and blends your old rate with the new term's rate.
Does your province have its own rules?
Taxes and fees on a home purchase, and some programs for first-time buyers, differ by province. Pick yours to see where to look. We remember your choice on this device only.